Weekly Outlook |Strong Upside Momentum Starting to Unfold

Last week financial markets did not offer significant momentum in general. The US- Dollar was able to gear up some steam, which seemingly caused equity markets to remain in a sideways pattern. After an initial rise to higher levels, the S&P 500 and Nasdaq both closed in neutral territory. However, it is remarkable to observe that crypto markets remain extremely strong. Bitcoin was shy of testing the USD 119,000 zone, while ETH also moved above the USD 3,000 price tag. Positive sign altogether that the altcoin season might continue to push prices higher for now. 

Important events this week:

– CA – consumer price data– Consumer prices in Canada are supposed to fall. The monthly rate is expected to fall from 0.6% to 0.2%. Indeed, falling numbers might hence cause the Canadian Dollar to weaken and the recent trend to extend. In particular the currently stronger Euro could gear up some momentum in the end.

EURCAD monthly chart

The monthly chart above shows, that the currency pair has broken the important resistance zone of 1.5800 and is now trading just below the psychological area of 1.6000. If this zone gives way, the market might show further strength. On the other hand, falling prices might also be on the cards, given that potentially strong resistance area. A sudden rise in consumer prices could hence offer a surprise push to lower levels, due to a stronger CAD. The data will be released on Tuesday, 15th of July at 14:30 CET.

– US producer price index – The monthly core rate of producer prices is expected to rise from 0.1% to 0.2%. This would market a very moderate increase in prices, which might be outperformed by the market. A higher rate could hence cause the Dollar to gear up steam again. 

USDJPY weekly chart

The weekly chart of the USDJPY currency pair resumed some bullish momentum again last week. The price is still capped in the sideways trading pattern and might also follow the long-term trend towards lower levels. On the trend the recent positive momentum might also continue to push markets to the upside again. If the zone of 147.50 breaks, higher prices might be seen. Soon thereafter also the 50- moving average might be of significance if prices can break to the upside. In general, though, a lot might depend on the producer- as well as consumer prices this week. Positive numbers could offer fresh upside momentum. The news will be released on Wednesday, 16th July at 14:30 CET.